Michael Schwartz had a problem with his salesforce. It wasn’t that they weren’t selling. It’s what happened afterward. Schwartz is sales operations vice president at Incentra Solutions in Boulder, Colo., a fast-growing provider of storage and IT services for mid-sized companies. In the past two years, Incentra acquired five smaller businesses and now has close to 120 sales representatives in multiple regional offices. At the month’s end, when it was time to calculate and pay salespeople commissions, each region’s finance department used a different process. It took too long, and back at corporate, Schwartz was in the dark as to whether the company’s commission structure was really working. “It was difficult for us, without a consistent process, to review numbers in a lot of detail,” he says. Like many other companies, Incentra built its commission plans on spreadsheets. But as experiences there and elsewhere have shown, spreadsheets do a poor job of calculating complicated sales commissions. Salespeople even have a name for the problem: “Excel hell.” Earlier this year, Schwartz switched to something that’s picking up steam as a spreadsheet alternative: sales incentive management software, which automates the job of creating and managing a company’s reward system for meeting sales quotas and goals. Typical sales incentive software includes tools to devise, document, and allocate incentive plans and a Web-based portal that sales reps and sales managers use to track data and generate reports. Appealing to small businesses Sales incentive software has been around for a while, but vendors only recently introduced a low-cost software-as-a-service (SaaS) version that’s affordable and appealing to small and mid-sized businesses. Costs range from $20 to $50 a month per person, according to analysts. That’s more expensive than a spreadsheet, but the extra cost is worth it because it eliminates mistakes and accidental overpayments that routinely happen in spreadsheet-based commission plans, says Michael Dunne, a sales software analyst at Gartner, the Stamford, Conn., technology research and consulting firm. Also, because the software generates more detailed reports, companies can see whether their commission structure is motivating salespeople to sell the most profitable product mix, Dunne says. That’s important to a company like Incentra, which projects a big jump in revenue this year but is still working to get itself out of the red. To that end, Schwartz started rolling out a sales incentive software program from Callidus Software in mid-March and expected to have 85 percent of its salesforce up and running by April. If all goes well, Schwartz plans to use the software for other employees who receive commissions, including inside sales representatives, engineers, and corporate staff. Besides Callidus, vendors that sell sales incentive management software to small and mid-size companies on an SaaS basis include: Xactly
